An inactive Wall Street brokerage firm, its chairman and
three top executives pleaded guilty Friday to multiple counts of securities
fraud and collusion to fix stock prices on the Nasdaq market.

The plea agreement, which averted a trial that was scheduled
to begin Monday, calls for D.H. Blair and Co. and the executives to pay $21
million to reimburse defrauded customers.

According to Manhattan District Attorney Robert Morgenthau,
the executives and 10 of their brokers who previously pleaded guilty engaged
in "a massive scheme of securities fraud" and "price manipulation" from 1989
through 1998. During those years, D.H. Blair and its "investment bank affiliate"
brought public nearly 100 small companies.

"Unknown to its tens of thousands of retail customers,
Blair consistently arranged to buy initial public offering (IPO) shares from
its preferred clients  often celebrities and wealthy individuals 
at a predetermined premium and resell them to its rank-and-file clients at artificially
inflated prices," Morgenthau said in a statement. "Many of the less-favored
customers were unsophisticated investors of limited means, in some cases elderly
or infirm, and completely unsuitable for Blair's highly speculative securities."

When these customers wanted to sell their shares, they
were "aggressively discouraged from doing so," the district attorney says.

D.H. Blair, which operated for 94 years before selling
its assets in 1998, colluded with another brokerage, A.R. Baron, Morgenthau
charges. In 1997, company founder Andrew Bressman, a former D.H. Blair employee,
pleaded guilty to defrauding A.R. Baron customers of more than $1 million from
August 1992 to July 1996.

The D.H. Blair executives who pleaded guilty Friday were
Chairman Kenton Wood, Vice Chairmen Alan Stahler and Kalman Renov, and head
trader Vito Capotorto. Wood, Stahler and Capotorto face prison terms of up to
four years, and Renov faces probation, a Morgenthau spokeswoman says.

Lawyers for Wood and D.H. Blair had no comment. Stahler
and Renov were represented by different law firms but issued the same written
statements. The two executives "took this difficult step to close a painful
chapter" in their and their families' lives and "have always tried to be faithful"
to their responsibility to their "loyal clients and friends," the statements
said.

Gary Naftalis, Capotorto's lawyer, says "Mr. Capotorto
wants to get this matter behind him so he can get on with the rest of his life."

Stahler and Renov are sons-in-law of J. Morton Davis, former
D.H. Blair chairman and current chairman of D.H. Blair Investment Banking, which
underwrote D.H. Blair's initial public stock offerings. Davis divided D.H. Blair
into two entities in 1992, retaining control of the firm's investment banking
business and transferring ownership of D.H. Blair's retail brokerage business
to Wood, his two daughters and Capotorto.

No criminal charges have been brought against Davis, but
more than 90 civil lawsuits have been filed against him, D.H. Blair and its
brokers by former stockholders who charge they were defrauded.

Davis' lawyer did not return calls for comment.

D.H. Blair officials said in a statement that the guilty
pleas to criminal charges relate only to their company "and in no way involve
D.H. Blair Investment Banking Corp."